Singapore GIC converts preferred Citi stock into common shrs

CostasParis

SINGAPORE (MarketWatch) -- Government of Singapore Investment Corp. Friday said it has agreed to convert its preferred shares in Citigroup Inc.
C, -0.25%
into common stock at $3.25 a share.

The conversion price is well below the originally agreed conversion price of $26.35 a share. GIC said in a statement that after the conversion its stake in the troubled U.S. bank will rise to an estimated 11.1%

According to a Securities and Exchange Commission filing in late January, GIC held a beneficial 5.3% stake, or 303.8 million shares in Citigroup. These include preferred shares that can be converted into 261.1 million common shares.

The move comes after the U.S. government said Friday it is willing to convert up to $25 billion of its preferred stock in Citigroup to common equity in a move to protect shareholders against future losses.

"As a shareholder, GIC supports the initiative by Citigroup and the U.S. government to strengthen the quality of the bank's capital base in view of the challenging economic environment," GIC said.

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